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The succession battle at the Fed and the Fed’s reaction function
Long-term interest rates are largely a reflection of expected future short-term future interest rates plus a term premium. So when you see yields move up, it reflects either an increase in term premiums from uncertainty or a change in the…
The changing debate over China’s economy
The serious debate has not been about whether or not China’s collapse is imminent. The disagreement was whether or not investment misallocation and the repression of household income growth were fundamental to the Chinese growth model. The…
The US Student Loan Problem
By Sober Look
The US Congress is nearing a compromise on the issue of student loan interest rates. Apparently loan rates will be changed from fixed to floating with an overall cap (see story). While rates are important, there is a much…
How the United States gets deflation and becomes the next Japan
I spoke at a Euromoney conference on inflation-linked products last year. My thesis at the time that deflation is the real problem and that inflation isn't going to be a concern - which has largely proved right - was out of step with most…
Tech links: 2013-08-01
Tech news links for 1 Aug 2013. These are my tech links from early today. I haven't seen anything from today's new yet and that means there's nothing in here from the Motorola X debut. That's going to be a very big story over the next few…
Bank runs: who’s going to clean up the mess afterwards?
By Frances Coppola
In my post on the anatomy of a bank run, I suggested that the rule should be "provide central bank liquidity support to everything, taxpayer support to nothing". This is because in a bank run/liquidity crisis, it isn't…
Mario Draghi repeats ECB’s forward guidance
By Marc Chandler
Today, ECB President Draghi essentially repeated his comments from last month. The key is that rates will remain at current levels or lower for an extended period and, although the economy is gradually recovering, growth…
RBI struggles as India’s short-term yield goes vertical
By Sober Look
Here is a quick update on India's ongoing financial stress. Capital outflows from stocks over the past couple of months reached a post-2008 high, prompting Goldman to downgrade the nation's equity market.
Bloomberg: -…
Fed Statement Similar, No Talk of Tapering
With many observers expecting the Fed to taper in September, disappointment that there was nothing in the statement to support such ideas has seen the dollar fall and the stocks and bonds traded higher.